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Drink In These 5 Top Stocks

These are some of the most talked-about stocks around.

Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places people gather to discuss news, sports or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual water cooler daily to rate stocks and delve into their merits as investments.

Our 125,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 5,400 stocks -- has earned its points by seeking out the businesses it thinks will outperform the market. Below, we'll take a look at some of the top stocks in the CAPS universe that you're talking about the most, and explore whether you think they'll continue their winning ways.

Stock

CAPS Rating (out of 5)

No. of Calls

% Outperform Calls

Chevron(NYSE:CVX)

****

2833

95%

China Mobile(NYSE:CHL)

****

3114

97%

IBM(NYSE:IBM)

****

3214

89%

PepsiCo(NYSE:PEP)

*****

3224

97%

Transocean(NYSE:RIG)

*****

5026

98%

A tall drink of waterThere are certain rules in business that are generally just not broken. For example, money market funds fear to "break the buck" lest it cause a run on their assets, and oil companies shudder at the thought of breaking a contract for rigs. In fact, so solid are these rig contracts that the contract drillers like Transocean and Diamond Offshore(NYSE:DO) are able to tout their backlogs for years in advance as a sign of the strength of their business.

Yet these are interesting times. Money fund giant Reserve Primary did the unthinkable last September and "broke the buck," allowing its net asset value to sink below the $1 level at which all such funds typically trade. And more oil companies are finding the economic climate so severe that they're willing to break their contracts with the rig companies, which recently happened with Diamond Offshore and others.

The big-name oil companies that make up the bulk of Transocean's contracts are unlikely to follow suit, however, meaning that while there may be a few cracks in the wall, the dam is still holding steady. CAPS member prayfirst25177 thinks the contract driller's backlog will prove profitable over the long haul:

Not affected by oil prices so much, have many long term contracts already booked for the next several years. Oil won't stay under $40 much longer either. Should be a big winner in the next 2-5 years.

Feeling gaseousBig Blue was looking mighty green recently, sporting record revenue of $103 billion for 2008 and generating $16.7 billion in pre-tax profit. IBM's consulting arms reported new services signings of $17.2 billion and had 24 deals valued at more than $100 million each, with a year-end backlog worth some $117 billion.

CAPS member aldough is concerned that with such heavy reliance on consulting services, IBM will eventually feel the pinch:

I think IBM will see a large reduction in consulting fees as spending is curtailed. Since the company is highly levered, this will have a large impact on earnings.

Certainly, there’s another business consultant that has seen its revenue dry up. Corporate Executive Board(NASDAQ:EXBD), which helps companies steer through difficult environments like this by providing access to industry best practices, saw its contract values fall by more than 7% last quarter. Clients were either rattled by conditions or they simply folded up and disappeared, and a worsening recession could mean such trials continue.

Gather 'roundThe CAPS community can be like trying to take a sip from a fire hose: There are so many good opinions about today's top companies. Why not grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS water cooler, where your input can help guide other investors to stocks with bright prospects for growth? Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.

Sign up today for the completely free service, and let us hear what you have to say about the great -- and almost great -- companies that interest you.

Author

Rich has been a Fool since 1998 and writing for the site since 2004. After 20 years of patrolling the mean streets of suburbia, he hung up his badge and gun to take up a pen full time.

Having made the streets safe for Truth, Justice and Krispy Kreme donuts, he now patrols the markets looking for companies he can lock up as long-term holdings in a portfolio. So follow him on Facebook and Twitter for the most important industry news in retail and consumer products and other great stories.